Risk and Opportunity
At ASEH, climate-related risks and opportunities are identified across our entire value chain, encompassing upstream suppliers, internal operations, and downstream customers. The analysis covered 110 global consolidated subsidiaries, enabling a comprehensive understanding of overall climate risks and opportunities. Based on a time-frame analysis of potential impacts, in response to these findings, we will continue to formulate more forward-looking and effective strategies to enhance climate resilience and seize potential opportunities for driving sustainable and transformative growth.
Climate Change Risks
Timeframe of Impact
- Short-term
- Mid-term
- Long-term
Scenario Description
Failure to meet customers’ low-carbon transition requirements
Impact Explanation
Failure to meet customers’ transition requirements may affect market competitiveness
Location in The Value Chain
- Company operations
- Upstream or supply chain
- Downstream or end-user
Potential Financial Impact
- Increase in direct costs
- Loss of existing customers
- Decline market demand
Financial Impact Assessment (USD Million)
797.84~2,291.65
Management Approach
- Establish a renewable energy procurement platform to comply with local regulations and meet customer requirements
- Monitor energy consumption status and energy plans quarterly and regularly report implementation status to management
Management Cost (USD Million)
1.44
Timeframe of Impact
- Mid-term
- Long-Term
Scenario Description
The high uncertainties of extreme climate and natural disaster events may cause operational disruptions or shipment delays
Impact Explanation
Operational disruptions or shipment delays
Location in The Value Chain
- Company operations
- Upstream or supply chain
- Downstream or end-user
Potential Financial Impact
- Reduced revenue
- Increase in operating costs
Financial Impact Assessment (USD Million)
2.32~30.66
Management Approach
- Create a business continuity plan (BCP) for all manufacturing sites
- Distribute risks across global operations
Management Cost (USD Million)
0.91
Timeframe of Impact
- Short-Term
- Mid-term
Scenario Description
Failure to comply with renewable energy-related laws results in the payment of renewable energy-related fees as stipulated by law
Impact Explanation
Possible increase in operating costs
Location in The Value Chain
- Company operations
- Downstream or end-user
Potential Financial Impact
- Increase in compliance costs
Financial Impact Assessment (USD Million)
8.88
Management Approach
- Actively purchase renewable energy
- Develop/invest in renewable energy systems
Management Cost (USD Million)
3.11
Timeframe of Impact
- Mid-term
- Long-Term
Scenario Description
Investing in hydroelectric power companies may carry the risk of damage to power generation infrastructure due to extreme weather events
Impact Explanation
Damage to power generation facilities or operational disruptions due to extreme weather events
Location in The Value Chain
- Company operations
- Upstream or supply chain
- Downstream or end-user
Potential Financial Impact
- Decrease in asset value
Financial Impact Assessment (USD Million)
0.1~0.58
Management Approach
- Consider hydrological conditions and extreme climate risks during site selection and design, and continuously maintain and manage facilities during construction and operation
- Base investment decisions on a comprehensive assessment of financial feasibility, investment risks, compliance, ESG and sustainability benefits, as well as synergy with company strategies
Management Cost (USD Million)
0.14
Climate Change Opportunities
Timeframe of Impact
- Short-term
- Mid-term
- Long-Term
Scenario Description
- Investing in renewable energy business
Impact Explanation
- Obtaining renewable energy reduces carbon fees
Location in The Value Chain
- Company operations
- Downstream or end-user
Potential Financial Impact
- Decrease in operating costs
Financial Impact Assessment (USD Million)
19.77
Management Approach
- Invest in renewable energy businesses or joint ventures and supply renewable electricity to subsidiaries
Management Cost (USD Million)
1.92
Timeframe of Impact
- Mid-term
Scenario Description
- Setting carbon reduction targets and implementing reduction initiatives
Impact Explanation
- Achieving carbon reduction targets can reduce financial risks
- Market competitiveness is enhanced
Location in The Value Chain
- Company operations
- Upstream or supply chain
- Downstream or end-user
Potential Financial Impact
- Increased competitiveness
Financial Impact Assessment (USD Million)
1,151.72~1,125.11
Management Approach
- Set SBTi net-zero goals and launch five key strategies to fulfill net-zero commitments
- Establish management platforms to monitor subsidiaries’ carbon reduction progress on a quarterly basis
Management Cost (USD Million)
69.16
Timeframe of Impact
- Short-term
Scenario Description
- Transitioning to low-carbon energy diversifies exposure to energy price volatility
- Partnership with energy companies provides access to cost-competitive renewable electricity
Impact Explanation
- Acquire low-cost resources or create investment returns
Location in The Value Chain
- Company operations
- Upstream or supply chain
- Downstream or end-user
Potential Financial Impact
- Adaptation to climate change leads to lower operating costs
- Energy diversification
Financial Impact Assessment (USD Million)
0.04
Management Approach
- Use wind power, hydropower, solar energy, and other types of renewable power
- Partner with different industries to obtain renewable power at a reasonable cost
Management Cost (USD Million)
0.03
Timeframe of Impact
- Short-term
- Mid-term
- Long-Term
Scenario Description
- Investing in or developing carbon reduction projects to obtain carbon credits for use in corporate emissions management
Impact Explanation
- Selling or auctioning carbon credits can generate carbon trading revenues
Location in The Value Chain
- Company operations
Potential Financial Impact
- Increase in non-operating income
Financial Impact Assessment (USD Million)
2.2 ~ 2.93
Management Approach
- Develop local carbon credit methodologies
- Engage in carbon reduction projects and obtain government-issued carbon credits
Management Cost (USD Million)
20.66
Water Risks
Timeframe of Impact
- Short-term
- Mid-term
Scenario Description
Plant shutdown due to accidents or natural disasters results in delayed shipments
Impact Explanation
Losses in revenue due to delayed shipments
Location in The Value Chain
- Company operations
- Upstream or supply chain
- Downstream or end-users
Potential Financial Impact
- Increase in indirect costs
- Increase in capital expenditure
- Decline in overall revenue
Financial Impact Assessment (USD Million)
0.14~1.69
Management Approach
- Conduct water risk assessments and diversify water sources to reduce the risk of operational disruptions caused by water shortages/flooding
- Incorporate water risk into supplier management, and establish multiple supply sources and a safety stock mechanism
Management Cost (USD Million)
0.03
Timeframe of Impact
- Short-term
- Mid-term
Scenario Description
The uncertainty of water regulations leads to unpredictable compliance risks and expenditures
Impact Explanation
Additional costs for non-compliance with regulatory requirements
Location in The Value Chain
- Company operations
Potential Financial Impact
- Increased indirect costs
- Increase in capital expenditure
Financial Impact Assessment (USD Million)
3.41~6.83
Management Approach
- Establish a regulatory tracking mechanism to assess the impact of policy changes on operations and costs in advance
- Improve process water efficiency and water recycling capabilities
Management Cost (USD Million)
105.04
Water Opportunities
Timeframe of Impact
- Short-term
- Mid-term
- Long-term
Scenario Description
Improving water efficiency helps reduce dependence on external water sources
Impact Explanation
Reduced cost of purchased water
Location in The Value Chain
- Company operations
Potential Financial Impact
- Reduced operating costs
- Enhanced brand value
- Investment opportunities
Financial Impact Assessment (USD Million)
3.6
Management Approach
- Continuously promote water conservation in manufacturing processes and the use of efficient water-saving technologies
- Improve water efficiency through data monitoring and analysis, and continuously explore water-saving opportunities
Management Cost (USD Million)
23
Timeframe of Impact
- Mid-term
Scenario Description
Seeking alternative water sources reduces water shortage risks and lowers operating costs
Impact Explanation
Avoiding revenue losses due to water shortages
Location in The Value Chain
- Company operations
Potential Financial Impact
- Reduced operating costs
- Increased competitiveness
- Enhanced brand value
Financial Impact Assessment (USD Million)
338~564
Management Approach
- Increase wastewater recycling rate and use of reclaimed water to reduce dependence on external water sources
- Increase water security by establishing other supplies of water, such as reclaimed water, recycled water, and alternative sources
Management Cost (USD Million)
179
Other topics
Other topics
